This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 8/2/2019

Overview

The United Kingdom has quickly developed into one of the most attractive markets in the world for advanced smart grid technology and applications. Thanks to a highly competitive electricity sector and recent efforts by the government and regulators, the UK market offers many prospects: UK public and private organizations are investing in grid upgrades, creating significant business opportunities for U.S. companies that have developed innovative products, services or technologies related to the smart grids ICT segment. Increasing demand, constrained supply, emphasis on energy security and challenging carbon reduction targets driving transformation in energy and utilities and smart grids technologies will play a key role in this space.


Leading Sub-Sectors

Target sectors holding high potential for U.S exporters include:

  • Smart meters and advanced metering infrastructure

  • Communication and data management software

  • Grid optimization and automation technologies

  • Demand response and control systems

  • Energy management for distributed generation and storage

  • Cyber security software and services

  • Consumer engagement platforms and services

Opportunities

United Kingdom purchasers of U.S. smart grid goods and services include generation, transmission, and distribution companies. The UK gas and electricity market is unbundled (non-vertically integrated) and the major stakeholders involved in the implementation of smart grids include:

  • Suppliers: British Gas, EdF Energy, E.ON UK, RWE npower, Scottish Power and SSE (this six organizations are known as the “Big 6” and control 95% of the energy retail market);

  • Transmission networks operators: National Grid, Scottish Power Transmission, Scottish Hydro Electric Transmission and Northern Ireland Electricity; and

  • Distribution networks operators: Electricity North West, Northern Ireland Electricity, Northern PowerGrid, SP Energy Networks, SSE Power Distribution, UK Power Networks and Western Power Distribution.

The UK smart meter roll-out program will see a $18 billion investment in the mass roll-out of 53 million smart meters to all homes and small businesses, beginning in 2016 and to be completed by 2020. The ‘Big 6’ energy suppliers are leading the rollout, coordinated by government with industry support. It will be governed by industry regulator Ofgem once the meters are in place. There are now over 10 million smart and advanced meters operating across homes and businesses in Great Britain, by both large and small energy suppliers, a 71 per cent increase on the number of meters in operation as at 31 December 2016.

The ICT community provide the ‘smart’ to a traditional industry via:

  • Communications Services – Transferring huge new volumes of energy data to the centralized Data and Communication company (DCC)

  • Data Services – Controlling, securing and using that data to improve the energy system

  • Consumer Access Devices – Engaging customers in their energy usage and building on this to develop an integrated ‘smart home’

The Energy Networks Association Smart Networks Portal lists the various UK smart grids projects funded by the government and is a good resource to find out the major players (potential buyers and partners for U.S. companies) involved in this space. Currently there are over 1,600 smart grid projects in the UK.

Through a Network Innovation Stimulus, Ofgem is providing backing to innovative projects which aim to help make the energy networks smarter, and accelerate the development of a low carbon energy sector and delivering financial benefits to consumers. The Stimulus includes two annual Network Innovation Competitions (NICs): one for electricity network companies and one for gas network companies. Through the NICs network companies compete for funding for the research, development and demonstration of new technologies, operating and commercial arrangements.

Development of the UK smart grid is creating opportunities for traditional energy infrastructure vendors while opening the market to new players. Traditional vendors will benefit from large-scale renewal of utility assets as customer and grid applications are deployed and will be able to differentiate their product lines through increased functionality and integration with other smart technologies. New players – IT providers, networking and telecommunications companies, and systems integrators – will benefit from major technologies investments.

Capturing these opportunities however will not be easy: competition is stiff, and U.S. solutions providers need to develop a compelling business model:

  • Deep understanding of where the value is in the evolving smart grid. Utilities are demanding more clearly articulated value propositions, e.g., reduced operating costs, increased grid efficiency, improved customer engagement

  • Sound grasp of government and regulatory incentives and impact of legislation

  • Appreciation of long sales cycles that characterize the utility procurement processes

  • Provision of interoperable, secure, flexible solutions. From the utility perspective, getting secure, future-proofed products has become a top priority. In the rapidly changing smart grid environment, utility customers are attaching greater importance to flexibility offered to incorporate future smart grid elements (e.g. distributed generation, electric vehicles, distributed storage)

  • The ability to identify and manage partnerships to provide multi-disciplinary solutions. Utilities now face the prospect of dealing with dozens of providers to implement a single smart grid project. Technology providers must customize their solutions and be prepared to partner.  All U.S. companies (from large to small) doing business in the UK are collaborating with partners

Web Resources

Industry Events
Low Carbon Networks & Innovation Conference
30-31 October, 2019
Glasgow

Trade Associations: Energy Networks Association  

Government Departments: Department for Business, Energy & Industrial Strategy (BEIS)

For further information, please contact:
Claudia Colombo
Commercial Specialist
U.S. Commercial Service
Tel: +44 (0)20 7891 3443
Email: Claudia.Colombo@trade.gov 
 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.